Are Investors Undervaluing Capital Bancorp (CBNK) Right Now?

CBNK

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Capital Bancorp (CBNK - Free Report) . CBNK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.33 right now. For comparison, its industry sports an average P/E of 8.53. CBNK's Forward P/E has been as high as 8.86 and as low as 5.33, with a median of 7.65, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CBNK has a P/S ratio of 1.42. This compares to its industry's average P/S of 1.63.

Finally, investors should note that CBNK has a P/CF ratio of 7.94. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.30. Within the past 12 months, CBNK's P/CF has been as high as 7.96 and as low as 5.22, with a median of 7.09.

These are just a handful of the figures considered in Capital Bancorp's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CBNK is an impressive value stock right now.

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